New start for Whyalla
GFG Alliance to steer the Whyalla steelworks and mines along a competitive, sustainable future.
Having recently acquired Arrium’s Australian operations (31 August 2017) – the country’s largest integrated steel and mining business – GFG Alliance is working closely with management and its workforce as it looks to finalise its transformation plan, detailing plans for major capital investments across several sites.
GFG Alliance is a global metals, industry and energy group and has a shared long-term vision to integrate Whyalla’s steel value-chain into its global operations.
During a day of festivities marking the acquisition at Whyalla on 1 September, banners and flags bearing the new GFG Alliance brands were unveiled – Liberty OneSteel for the former Whyalla OneSteel operations and associated operating divisions, SIMEC Mining for the iron ore operations, and SIMEC Infrastructure for the port and rail operations.
Key elements of GFG’s intended transformation to expand the capability of its Australian businesses involve investing up to US$1billion across the Whyalla steelworks to modernise key parts of the plant, expand steel-making capacity, expand the range of steel grades and downstream products produced, create high-value export opportunities, and improve energy capabilities employing contemporary and renewable approaches.
GFG Alliance Executive Chairman, Sanjeev Gupta, has personally taken on the role as CEO through the 100-day review process to focus on the transformation, along with pursuing other Australian opportunities.
Those opportunities have already included buying a majority stake in Adelaide renewable power company, Zen Energy, announced 20 September. To be rebranded SIMEC Zen Energy, Sanjeev said the joint venture will become a key part of the strategy to deliver cheaper, more reliable and environmentally sustainable energy, which is vital given GFG is a major user of industrial energy in Australia.
Steely resolve creates new chapter
The successful handover to the GFG Alliance is a case book example of how diverse stakeholders can join forces to work through challenges and then design and implement solutions.
Over 17 months, against a backdrop of uncertainty and a complex administration, the workforce, unions, South Australia’s Steel Task Force, various supporting agencies, state and federal governments, administrator KordaMentha, and the Whyalla community remained united in building a business case for continued operations. This determined approach gave the town’s steel-making, mining and port operations every chance of thriving and supporting their sale to a new owner.
Lending further weight to support the strategic capacity of steel making from the region, the state government committed $50 million to a new owner for co-investment of capital improvements at the Whyalla site.
South Australia’s Steel Task Force coordinated the state government’s actions advocating for the operations, the Whyalla region and the national steel industry under the Support our Steel Campaign.
That combined effort played a major role in strengthening trade remedies to support a level playing field for steel trade. The task force also contributed to a Senate Inquiry into the national steel industry, while working with the federal government to identify projects to support operations including fast-tracking the Adelaide to Tarcoola rail upgrade.
The state’s Industry Advocate promoted the case for other states to follow South Australia’s lead in adopting Australian Standards for steel products and steel fabrication and backed an accreditation scheme ensuring fabricators were well positioned to fill orders. It also strengthened the state’s Industry Participation Policy which supports the use of locally manufactured steel in state government projects.
The Whyalla Response Office provided on-the-ground support, coordinating government services for the Whyalla community and businesses, and the Small Business Commissioner assisted with a concessional loan scheme of $9.6 million for Arrium’s eligible smaller creditors impacted by the administration.
As Whyalla moves from pre-sale to post-sale phase, the Steel Task Force is working to a new set of milestones, and will remain the central point of contact for government’s interactions, working closely with the GFG Alliance as the new business operations take shape.
A new working group is being established to support the Whyalla community and businesses to unlock economic opportunities by tapping into grant and training initiatives.
– Grace Taylor and Vicki Beard